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Alder Kemble’s Blog

JDS/Exact Sciences Proposal Passed

September 30, 2015 11:55 AM

Early this morning the Madison Common Council voted 12-6 to approve the Amended and Restated Development Agreement between the City of Madison and JDS Development, LLC. After 8 hours of testimony from the city negotiating team, the developer Bob Dunn, Exact Sciences CEO Kevin Conroy and several of his employees, members of the public and Mayor Soglin, the Council deliberated briefly and came to a vote. Much of the content of the testimony and delibration centered around the exemplary employment practices of Exact Sciences, and the imagined effects on downtown that an additional 400 office workers could have.

Unfortunately, that's not what we were voting on. We were voting on a legal contract between the City and a developer. Although Bob Dunn gave verbal assurances that he would build the hotel and the second office building on block 105, we were not voting on verbal assurances. Contracts exist to protect parties to a deal in the worst case scenario and to give legal recourse to parties when things don't go as planned. In my estimation, the contract does not provide the City with adequate protections for the unprecedented amount of risk we are being asked to take on behalf of taxpayers.

Here is a lightly edited transcript of the speech I gave explaining my vote 8 hours and 13 minutes into the meeting, after several colleagues described their lingering indecision on the issue:

As of yesterday I did know how I was going to vote, and that's because we're voting not on people's testimonies about how they love their jobs or on verbal assurances about things to come in the future, but we're voting on this contract. We're voting on a particular resolution, and this is what we really have to count on. I have been studying all of the iterations of this project all summer long. For me it comes down to the fact that the risk is way out of proportion to the vague rewards that we will get from this project.

When this was first put in front of us I was excited about jobs coming downtown. I support job creation and economic development based on putting money in people's pockets so they can take care of their needs, live a better life and engage in the local economy. But what I found was that as the details started coming out, the City was giving up everything, and the people asking for subsidies weren't giving up much.

The Mayor said this project changes our standards and parameters. It did. It threw them right out the window. We have no personal guarantees. We have to wait until 2032 to even begin to hold the developer accountable if they don't come up with the tax increment on the $20.8 million. The amount that the city has given up and the amount that the city is subsidizing so that a corporation can pay below market rent for custom built facilities downtown is not worth the risk to me as a policy maker and a responsible person to the taxpayers of this city.

Our negotiating team tried. They tried to get the annual tax increment test. They tried to get personal guarantees. They tried to get market rate rents. Our TIF Coordinator's report is full of how awful this deal actually is and how much against our policy it goes.

I weigh that against the fact that Exact Sciences is going to be in our community even if it is in Fitchburg. The commitment of the company to hire all these people in their expansion plans is still going to be there. And whatever development happens at Judge Doyle Square, Building Trades workers will be employed to build there. We will have Project Labor Agreements and Labor Peace Agreements.

But the fact is that we don't have a hotel that is even halfway adequate to meet the needs we say we have. And we're not getting "new and improved" Government East parking structure. We're getting a new and super expensive, inefficient parking structure.

We're paying the same amount or slightly more than the cost of the 650 undergrounded stalls operated by the developer for a fewer number of parking spaces that are above ground that should be costing $10,000 less per space. But we're paying more per space. It's not just a nominal inefficiency as Mr. Dunn said. It's a huge inefficiency we're paying for at the cost of $10,000 per space for 400 above ground spaces. It's a huge problem.

We're not voting on what Mr. Dunn or what Mr. Conroy or what Mr. Conroy's employees said tonight, we're voting on what's in the contract. And what's in the contract says we might not have a hotel for 11 years. We really might not. Like Mr. Dunn said, market conditions could change and they might not build in 2017. Really? Are we really going to say that's ok? When the whole point of the Judge Doyle Square project was to support our convention center large enough to have a 250 room block?

The union jobs, building tax base, infill development – all that could happen with another proposal and another developer. Bob Dunn isn't the only developer in town. This isn't the only proposal in front of us, in fact one of them wasn't asking for any public subsidy while delivering a hotel and an adequate parking structure.

And that's how yesterday I knew I was voting no, and today I know I'm voting no because nothing in the contract has changed, and it's a really bad deal for the city.

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